Ramachandra Ravishankar , Bangalore V. Income Tax Officer Ward-7(2)(5), Bangalore

ITA 215/BANG/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0640 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 05-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: H GURUSWAMY
• Keywords: Opportunity of being heard; Additional evidence; Cost of acquisition; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI B.R BASKARAN , ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.215/BANG/2019 ASSESSMENT YEAR : 2015-16 RAMACHANDRA RAVISHANKAR, NO.G-2, 12/1, 5 TH MAIN, SRIRANGA APARTMENTS, 2 ND B CROSS, ITI LAYOUT, BENGALURU-560 085. VS. THE INCOME-TAX OFFICER, WARD-7(2)(5), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI H GURUSWAMY, ITP RESPONDENT BY : SHRI SUNIL KUMAR AGARWAL, ADDL. CIT DATE OF HEARING : 20.11.2019 DATE OF PRONOUNCEMENT : 19.12.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 3/1/2019 PASSED BY LD CIT(A), BENGALURU AND IT RELA TES TO THE ASST. YEAR 2015-16. 2. THE GROUNDS OF APPEAL AND ADDITIONAL GROUNDS OF APPEAL URGED BY THE ASSESSEE RELATE TO FOLLOWING ISSUE. A) DISALLOWANCE OF DEDUCTION US/ 54 OF THE ACT IN RESPECT OF 1 FLAT. B) RESTRICTING THE COST OF ACQUISITION TO RS.4.64 L AKHS AS AGAINST 21.18 LAKHS CLAIMED BY THE ASSESSEE. ITA NO.215 /BANG/2019 PAGE 2 OF 5 3. THE ABOVE SAID 2 ISSUES RELATE TO DEDUCTION CLAI MED BY THE ASSESSEE WHILE COMPUTING LONG TERM CAPITAL GAIN ON SALE OF BUILDING. THE ASSESSEE IS AN INDIVIDUAL AND DURIN G THE YEAR UNDER CONSIDERATION THE ASSESSEE SOLD A HOUSE PROPERTY AN D PURCHASED 2 FLATS IN GROUND FLOOR AND FIRST FLOOR OF APARTMENT . THE ASSESSEE CLAIMED COST OF BOTH THE FLATS AS DEDUCTION US/ 54 OF THE ACT. WHILE COMPUTING THE COST OF ORIGINAL HOUSE THE ASSESSEE D ECALED THAT THE CONSTRUCTION OF THE HOUSE TOOK PLACE IN FINANCIAL Y EAR 1983-84 AND ACCORDINGLY COMPUTED INDEXED COST OF ACQUISITION A T RS.21.18 LAKHS. 4. SINCE THE ASSESEE DID NOT FURNISH ANY EVIDENCE T O PROVE THE COST OF CONSTRUCTION OF THE ORIGINAL HOUSE, THE AO COMPUTED THE COST OF BY ADOPTING THE GUIDANCE VALUE OF RESIDENT IAL LAND AT BASAVANAGUDI AREA FOR THE YEAR 1982 WHICH WAS FOUND TO BE RS.45/SFT. ACCORDINGLY THE AO RESTRICTED THE INDEX ED COST OF ACQUISITION TO RS.4,64,772/-. THE AO ALSO TOOK THE VIEW THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION OF COST OF 1 PLO T ONLY U/S 54 OF THE ACT. THE ASSESSEE HAD CLAIMED BEFORE AO THAT B OTH THE PLOTS SHOULD BE CONSIDERED AS ONE HOUSE. THE AO DEPUTED ITS INSPECTOR TO UNDERTAKE PHYSICAL VERIFICATION OF THE FLATS WHO REPORTED THAT BOTH THE FLATS ARE INDEPENDENT HAD ARE NOT CONNEC TED. ACCORDINGLY THE AO ALLOWED DEDUCTION U/S 54 OF THE ACT IN RESPE CT OF ONE PLOT ONLY. THE LD CIT(A) CONFIRMED THE SAME. ITA NO.215 /BANG/2019 PAGE 3 OF 5 5. BEFORE US THE LD AR FURNISHED PHOTO COPIES OF TH E FLATS AS ADDITIONAL EVIDENCE AND SUBMITTED THAT BOTH THE FLA TS HAVE BEEN INTERNALLY CONNECTED AND THE SAID FACTUM WAS NOT C ONSIDERED BY THE TAX AUTHORITIES. ACCORDINGLY HE SUBMITTED THAT BOTH THE FLATS SHOULD BE CONSIDERED AS ONE HOUSE AND HENCE THE COS T OF BOTH THE FLATS SHOULD BE ALLOWED AS DEDUCTION US/ 54 OF THE ACT. 6. WITH REGARD TO COST OF ACQUISITION THE LD AR SUB MITTED THAT THAT THE ASSESSEE HAD CONSTRUCTED THE HOUSE IN THE YEAR 1983-84 BUT THE AO HAS GIVEN DEDUCTION ONLY IN RESPECT OF C OST OF LAND AND HE DID NOT ALLOW DEDUCTION FOR COST OF CONSTRUCTION . ACCORDINGLY THE LD AR PRAYED THAT BOTH THE ISSUES MAY BE RESTORED T O THE FILE OF THE AO FOR EXAMINING THEM AFRESH. 7. WE HEARD THE LD DR AND PERUSED THE RECORD. HAVI NG REGARD TO THE FACT THAT THE ASSESSEE HAS FURNISHED COPIES OF PHOTOGRAPHS EVIDENCING JOINING OF BOTH THE FLATS AS ADDITIONAL EVIDENCE AND ALSO CONSIDERING THE FACT THAT THE AO HAS NOT CONSIDERED THE COST OF CONSTRUCTION WHILE COMPUTING COST OF ACQUISITION, W E ARE OF THE VIEW THAT THERE IS MERIT IN THE PRAYER OF THE LD AR. AC CORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) AND RESTORE BOT H THE ISSUES TO THE FILE OF THE AO FOR EXAMINING THEM AFRESH BY DUL Y CONSIDERING ADDITIONAL EVIDENCES, ANY OTHER INFORMATION AND E XPLANATIONS THAT MAY BE FURNISHED BY THE ASSESSEE. AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE AO MAY TAKE APPRO PRIATE DECISION IN ACCORDANCE WITH THE LAW. ITA NO.215 /BANG/2019 PAGE 4 OF 5 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER, 2019. SD/ - (BEENA PILLAI) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 19 TH DECEMBER, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE. ITA NO.215 /BANG/2019 PAGE 5 OF 5 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DICTATION NOTE ENCLOSED DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. .. 14. DICTATION NOTE ENCLOSED